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New Procurement Rules For Public Trusts – Trusts



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A new law will go into effect Nov. 1 which will level the
playing field for the acquisition of operational equipment,
supplies and services by governmental entities.

Oklahoma has more than 100 public trusts, which are separate
legal entities formed to benefit the State of Oklahoma or a city or
county within Oklahoma. Public trusts are used around the state to
operate hospitals, public utilities and other important government
services.

Senate Bill 173, which was supported by the Oklahoma Municipal
League, the City of Oklahoma City and the Oklahoma Hospital
Association, will eliminate outdated competitive bidding
requirements for public trusts, and permit them the flexibility
cities and counties currently have in obtaining required goods and
services needed for day-to-day operation.

Virtually all governmental entities, including public trusts,
will continue to be subject to competitive bidding requirements for
construction projects.

For years, before acquiring goods or services with a value in
excess of $50,000, a public trust has been required to publish a
bid notice for two consecutive weeks in a local newspaper and
required to award a contract to the lowest and best bidder
resulting from that solicitation. This likely made sense when
enacted as a way to safeguard government funds. However, in recent
years the requirements have hamstrung public trusts and prevented
them from accessing favorable contract rates available through
purchasing cooperatives. In addition, the specialized equipment
needed for the operation of hospitals and other public trust
businesses is primarily manufactured by national and international
companies not reached by local newspaper publication.

The Central Purchasing Act, which controls purchases by the
state and state agencies, was modernized several years ago to make
its purchasing requirements more efficient and cost-effective.
Senate Bill 173 will have the same effect for Oklahoma public
trusts.

The elimination of outdated bidding requirements is a favorable
development for public trusts. However, public trusts will continue
to have the obligation to use their funds in a reasonable, prudent
manner, and to assure that conflicts of interest and favoritism do
not find their way into procurement decisions.

Over the next few months, public trusts will need to develop new
purchasing policies and procedures that best meet their specific
needs. Some may want to look to the policies of their beneficiary
city or county. Others may want to consider policies within their
specific industry (e.g., healthcare, waste-water treatment, etc.).
Carefully crafted policies and procedures will be the key to
efficient and cost-effective operational purchases by public
trusts.

* This article first appeared in The Journal Record on June 21, 2022, and is
reproduced with permission from the publisher.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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